Last week, mortgage rates remained unchanged, but the demand for new home loans decreased. The average interest rate for 30-year fixed-rate mortgages stayed at 7.02%, with points increasing slightly. Refinancing applications dropped by 7%, but were still higher than the previous year. Purchase mortgage applications also decreased slightly, with FHA loans being the bright spot, increasing by 2%. Despite strong new and existing-home sales at the end of 2024, higher interest rates have hindered many potential buyers and homeowners from benefitting. However, if rates stabilize and inventory increases, purchase activity is expected to pick up in the coming months. This week, mortgage rates have not seen much movement, and the Federal Reserve meeting on Wednesday is not anticipated to bring any surprises. While there is always a possibility for a market shift, the overall expectation is for rates to remain stable. Overall, the housing market continues to face challenges with higher rates, but there is hope for improvement if conditions start to ease.
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Further decline in mortgage demand despite stable interest rates
